Bundesbank investigates Deutsche Bank: report

The Bundesbank has launched an investigation into claims that Deutsche Bank hid billions of dollars of losses on credit derivatives between 2006 and 2009, news reports said.

German central bank investigators are expected to travel to New York next week as part of the investigation “into allegations that misvaluing credit derivatives allowed Deutsche" to hide as much as $US12 billion in losses, helping it avoid a government bailout, the Financial Times reported on its web site.

The investigation centres on Deutsche’s dealings in complex credit derivatives, leveraged super senior trades, the news report said. The US Securities and Exchange Commission (SEC) is among the regulators investigating the claims, it said.

Deutsche Bank executives have denied the allegations, on Wednesday saying that the allegations were “more than 2 ½ years old" and had been the “subject of a careful and thorough" investigation by a law firm that found them “wholly unfounded", the report said.

The newspaper said that three Deutsche employees approached the SEC independently with “allegations that the bank misvalued a giant derivatives position, worth $US130 billion on a notional basis" the report said.